Home construction rebounds in 2012

Published: Saturday, December 8, 2012 at 4:24 p.m.

Last Modified: Saturday, December 8, 2012 at 4:24 p.m.

Builders in Volusia and Flagler counties sought more new home construction permits through the first nine months of this year than all of last year, further evidence of a recovering local housing market.

Home construction permits issued through third quarter

"The fear is gone and we are seeing a sense of urgency in buyers again," said Jim Paytas, owner of Paytas Homes, which is active in New Smyrna Beach, Ormond Beach, Palm, Coast and Port Orange.

"People see that foreclosures are down and the number of homes in the resale inventory is down. There is pent up cash," Paytas said. "People were scared to spend it before and are looking for alternatives now from banks and the stock market. They are looking at real estate."

In Volusia County, homebuilders pulled 575 single-family home construction permits from county and city offices through the first three quarters of 2012, according to the Volusia County Economic Development division. That's up 58.4 percent from the 363 permits issued over the same time period in 2011. It's also 21.3 percent more than the 474 permits issued in all of 2011.

In Flagler County, homebuilders pulled 166 single-family home construction permits through the first nine months of 2012, according to the Flagler Home Builders Association. That's up 32.8 percent from the 125 issued from January through September 2011. It's also up 5.7 percent from the 157 issued in all of last year.

Local activity mirrors what's happening nationally.

According to the U.S. Department of Commerce, an estimated 894,000 new home building permits were issued in September. That's up 12 percent from September 2011 and represents a four-year high.

Although new homes represent only about 20 percent of the home sales market, they have a significant impact on the economy. For each new home built, an average of three jobs are created for a year and it produces $90,000 in tax revenue, according to the National Association of Home Builders.

The increased activity has builders more optimistic, though a recognized index is still on the negative side.

The National Association of Home Builders/Wells Fargo builder sentiment index increased to 46 in November, the highest in 6.5 years. It was at 41 in October.

A reading below 50 still reflects a negative sentiment about the market, but the index has raced up 24 points in a year from a low point of 17 in October 2011.

"Last year was the worst for us in 27 years we have been in business," said Dale Stevenson of Skyway Builder in Palm Coast. "Last year, we did maybe $1.4 million in business. So far we are approaching $4 million this year including a couple in the $800,000 range."

Prospective home buyers are "pulling the trigger" on a purchase of a new home more now than a year ago, builders said. They point to buyers seeing the bottom of the market pass, prices starting to rise, historically low mortgage loan interest rates and poor quality on the remaining shrinking stock of available resales, including fewer foreclosures.

"It's the evolving economy. People are at the end of their frustration levels," said Debi Peterson, executive officer with the Flagler Home Builders Association. "They want a new home and are making it happen. Prices are still good and financing is cheap."

Newly built homes are more competitive in price with resales because a declining inventory of existing homes is pushing prices up and moratoriums on the collection of impact fees in both counties have lowered the cost of new home construction.

"The moratoriums have allowed us to lower our prices $12,000 to $14,000," said Bob Fitzsimmons, owner of Gallery Homes of DeLand. "So far this year, we have sold 30 homes, 22 in our Glenwood Springs subdivision. We sold 14 last year."

The Volusia County School Board suspended it $6,006 impact fee for 2012 and 2013.

Flagler County in October suspended for two years some of its impact fees equal to $1,705. Bunnell also waived some impact fees as did Volusia County and several Volusia cities.

There were 239 single-family residential permits issued in Volusia County in July through September. That's the highest in any quarter since 306 were issued in the same period in 2008.

In Flagler County, there were 61 permits issued in the third quarter, the fourth consecutive quarterly increase and the highest in at least the past three years.

"I see a steady slow growth for the next year to a year and half," Paytas said. "Then things will level off as builders gear up for the next level of trying to buy property. I think the resulting higher prices will also stall growth."

Meeting on impact fees

A committee working on a recommendation for setting a new Volusia County school impact fee when the current two-year moratorium expires will meet at 9 a.m. Thursday in the school district's Facilities Services Building, 3750 Olson Drive, Daytona Beach.

<p>Builders in Volusia and Flagler counties sought more new home construction permits through the first nine months of this year than all of last year, further evidence of a recovering local housing market. </p><p>"The fear is gone and we are seeing a sense of urgency in buyers again," said Jim Paytas, owner of Paytas Homes, which is active in New Smyrna Beach, Ormond Beach, Palm, Coast and Port Orange. </p><p>"People see that foreclosures are down and the number of homes in the resale inventory is down. There is pent up cash," Paytas said. "People were scared to spend it before and are looking for alternatives now from banks and the stock market. They are looking at real estate." </p><p>In Volusia County, homebuilders pulled 575 single-family home construction permits from county and city offices through the first three quarters of 2012, according to the Volusia County Economic Development division. That's up 58.4 percent from the 363 permits issued over the same time period in 2011. It's also 21.3 percent more than the 474 permits issued in all of 2011. </p><p>In Flagler County, homebuilders pulled 166 single-family home construction permits through the first nine months of 2012, according to the Flagler Home Builders Association. That's up 32.8 percent from the 125 issued from January through September 2011. It's also up 5.7 percent from the 157 issued in all of last year. </p><p>Local activity mirrors what's happening nationally. </p><p>According to the U.S. Department of Commerce, an estimated 894,000 new home building permits were issued in September. That's up 12 percent from September 2011 and represents a four-year high. </p><p>Although new homes represent only about 20 percent of the home sales market, they have a significant impact on the economy. For each new home built, an average of three jobs are created for a year and it produces $90,000 in tax revenue, according to the National Association of Home Builders. </p><p>The increased activity has builders more optimistic, though a recognized index is still on the negative side. </p><p>The National Association of Home Builders/Wells Fargo builder sentiment index increased to 46 in November, the highest in 6.5 years. It was at 41 in October. </p><p>A reading below 50 still reflects a negative sentiment about the market, but the index has raced up 24 points in a year from a low point of 17 in October 2011. </p><p>"Last year was the worst for us in 27 years we have been in business," said Dale Stevenson of Skyway Builder in Palm Coast. "Last year, we did maybe $1.4 million in business. So far we are approaching $4 million this year including a couple in the $800,000 range." </p><p>Prospective home buyers are "pulling the trigger" on a purchase of a new home more now than a year ago, builders said. They point to buyers seeing the bottom of the market pass, prices starting to rise, historically low mortgage loan interest rates and poor quality on the remaining shrinking stock of available resales, including fewer foreclosures. </p><p>"It's the evolving economy. People are at the end of their frustration levels," said Debi Peterson, executive officer with the Flagler Home Builders Association. "They want a new home and are making it happen. Prices are still good and financing is cheap." </p><p>Newly built homes are more competitive in price with resales because a declining inventory of existing homes is pushing prices up and moratoriums on the collection of impact fees in both counties have lowered the cost of new home construction. </p><p>"The moratoriums have allowed us to lower our prices $12,000 to $14,000," said Bob Fitzsimmons, owner of Gallery Homes of DeLand. "So far this year, we have sold 30 homes, 22 in our Glenwood Springs subdivision. We sold 14 last year." </p><p>The Volusia County School Board suspended it $6,006 impact fee for 2012 and 2013. </p><p>Flagler County in October suspended for two years some of its impact fees equal to $1,705. Bunnell also waived some impact fees as did Volusia County and several Volusia cities. </p><p>Third quarter activity especially boosted each county's permit numbers. </p><p>There were 239 single-family residential permits issued in Volusia County in July through September. That's the highest in any quarter since 306 were issued in the same period in 2008. </p><p>In Flagler County, there were 61 permits issued in the third quarter, the fourth consecutive quarterly increase and the highest in at least the past three years. </p><p>"I see a steady slow growth for the next year to a year and half," Paytas said. "Then things will level off as builders gear up for the next level of trying to buy property. I think the resulting higher prices will also stall growth."</p><h3>Meeting on impact fees</h3>
<p>A committee working on a recommendation for setting a new Volusia County school impact fee when the current two-year moratorium expires will meet at 9 a.m. Thursday in the school district's Facilities Services Building, 3750 Olson Drive, Daytona Beach.</p>